Construction industry passing the buck, says Sanral

AN ANGRY South African National Roads Agency (Sanral) boss Nazir Ali this week rubbished claims by former Murray & Roberts CEO Brian Bruce that the agency approached only six companies to tender for road contracts during the 2010 World Cup.

The construction industry has come under close scrutiny from government, competition authorities and civil society as its 30-year secret history of collusion tumbled out of the closet in recent months.

Competition authorities fined groups including Murray & Roberts, WBHO, Group Five and Aveng altogether R1.46bn for colluding on more than 300 projects worth R61bn, including for the World Cup.

In an interview with Business Times last week, Bruce claimed that he had no inkling of the tender rigging at the time.

Bruce also claimed that Sanral approached only six contractors to bid for the R20bn Gauteng Freeway Improvement Project, and that these companies would each get a share of the project.

“This is absolute nonsense,” Mr Ali said this week. “The construction industry has been caught out, and now people like Brian are just trying to pass the buck.”

He showed Business Times a prequalification document Sanral sent out to the industry. It said “the magnitude of the project was such that partnerships [are] required between Sanral and the construction industry to optimise resources in the industry to execute the work”.

Sanral’s aim was to encourage partnerships between construction companies with the highest grading — such as Murray & Roberts, Group Five, Aveng — and other, smaller contractors, especially smaller black-owned companies. The document stipulated that a consortium that passed the prequalifications process had to bid for all the work packages.

According to Mr Ali, 13 consortiums submitted application for prequalification. Six made the cut, and then had to tender for all the work packages.

Mr Ali said it was disappointing that someone like Bruce, who headed Murray & Roberts during the World Cup, was now blaming his juniors for corruption, rather than taking responsibility for what happened on his watch. “Brian was responsible for governance structures and the culture in that company.”

Last week, Bruce said he was not aware that Murray & Roberts as a company took part in collusive practices, and that this was rather the doing of a few individuals.

“I guess Brian is in a corner and has chosen to take the shotgun approach,” said Mr Ali.

He said Sanral and its legal team were investigating every avenue — including civil and criminal action — to take construction companies to task for possible overcharging. It was still unclear how much the construction industry made in extra profit from Sanral, but the roads agency wasn’t about to let the matter drop.

“Business in many industries in this country has a very low sense of morality and ethics and the relationship between business and government is toxic,” said Mr Ali.

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AN ANGRY South African National Roads Agency (Sanral) boss Nazir Ali this week rubbished claims by former Murray & Roberts CEO Brian Bruce that the agency approached only six companies to tender for road contracts during the 2010 World Cup.

The construction industry has come under close scrutiny from government, competition authorities and civil society as its 30-year secret history of collusion tumbled out of the closet in recent months.

Competition authorities fined groups including Murray & Roberts, WBHO, Group Five and Aveng altogether R1.46bn for colluding on more than 300 projects worth R61bn, including for the World Cup.

In an interview with Business Times last week, Bruce claimed that he had no inkling of the tender rigging at the time.

Bruce also claimed that Sanral approached only six contractors to bid for the R20bn Gauteng Freeway Improvement Project, and that these companies would each get a share of the project.

“This is absolute nonsense,” Mr Ali said this week. “The construction industry has been caught out, and now people like Brian are just trying to pass the buck.”

He showed Business Times a prequalification document Sanral sent out to the industry. It said “the magnitude of the project was such that partnerships [are] required between Sanral and the construction industry to optimise resources in the industry to execute the work”.

Sanral’s aim was to encourage partnerships between construction companies with the highest grading — such as Murray & Roberts, Group Five, Aveng — and other, smaller contractors, especially smaller black-owned companies. The document stipulated that a consortium that passed the prequalifications process had to bid for all the work packages.

According to Mr Ali, 13 consortiums submitted application for prequalification. Six made the cut, and then had to tender for all the work packages.

Mr Ali said it was disappointing that someone like Bruce, who headed Murray & Roberts during the World Cup, was now blaming his juniors for corruption, rather than taking responsibility for what happened on his watch. “Brian was responsible for governance structures and the culture in that company.”

Last week, Bruce said he was not aware that Murray & Roberts as a company took part in collusive practices, and that this was rather the doing of a few individuals.

“I guess Brian is in a corner and has chosen to take the shotgun approach,” said Mr Ali.

He said Sanral and its legal team were investigating every avenue — including civil and criminal action — to take construction companies to task for possible overcharging. It was still unclear how much the construction industry made in extra profit from Sanral, but the roads agency wasn’t about to let the matter drop.

“Business in many industries in this country has a very low sense of morality and ethics and the relationship between business and government is toxic,” said Mr Ali.

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